Export Liberalization, Job Creation and the Skill Premium : Evidence from the U.S.-Vietnam Bilateral Trade Agreement
This paper explores how the expansion of labor-intensive manufacturing exports resulting from the United States-Vietnam Bilateral Trade Agreement in 2001 translated into wages of skilled and unskilled workers and the skill premium in Vietnam throug...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2013/04/17625179/export-liberalization-job-creation-skill-premium-evidence-us-vietnam-bilateral-trade-agreement http://hdl.handle.net/10986/15565 |
| Summary: | This paper explores how the expansion of
labor-intensive manufacturing exports resulting from the
United States-Vietnam Bilateral Trade Agreement in 2001
translated into wages of skilled and unskilled workers and
the skill premium in Vietnam through the channel of labor
demand. In order to isolate the impacts of trade shock from
the effects of other market-oriented reforms, a strategy of
exploiting the regional variation in difference in exposure
to trade is employed. Using the data on panel individuals
from the Vietnam Household Living Standards Surveys of 2002
and 2004, and addressing the issue of endogeneity, the
results confirm the existence of a Stolper-Samuelson type
effect. That is, those provinces more exposed to the
increase in exports experienced relatively larger wage
growth for unskilled workers and a decline of (or a smaller
increase in) the relative wages of skilled and unskilled
workers. During the period 2000-2004, the skill premium
increased for Vietnam's economy as a whole in the
sample of panel individuals. Thus, the Stolper-Samuelson
type effect appears to have mitigated but did not outweigh
the impacts of other factors that contributed to the rise in
the skill premium. |
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